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Kolkata: 700025. For Office & Information : Office : (033)- 2486-4919 & 2419-1631 Mobile : 98307- 16788 (Ranjan) 98740- 42374 (Biplab) Website : www.costmanagement.net.in E-mail : dadaboudi@yahoo.com SMS to Alok Chakraborty : 98301- 05664
Preface Management accounting is the process of identifying, measuring,
analysing, interpreting, and communicating information following the
goals of the organisation. It also includes the strategic planning of
the business.
The role of management accounting is very different in today's world.
Management accountants serve as internal business consultants, with
the cross-functional relationship of the managers from all areas of
the organization.
A management accountant plays a vital role to create value for the
organisation by managing resources, activities, and people to achieve
the goals.
The top management ( i.e. owners, directors) set the goals of the
organisation with the help of managers. To fulfill that, an
organisation acquires resources, hires people, and then engages it in
a pre-determined set of activities. It is up to the management team to
make the best use of the organisation's resources, activities, and
people in achieving the organisation's goals. The day-to-day work of
the management team comprises four activities:
. Decision making
. Planning
. Directing operational activities
. Controlling. The process of management accounting adds & increase value of an
organisation by following five major objectives:
1. Provides information for decision making and planning
2. Assist managers in directing and controlling operational
activities.
3. Motivate mangers to achieve organisation's goals.
4. Performance measurement with budgetary control and/or standard
costing .
5. Evaluate the competitive position in the industry in pursuance
to strategic planning.
Now days management accounting analysis is considered so crucial in
managing an enterprise that in most cases managerial accountants are
integral members of the management team. In the present days
competitive business environment only the management accountant can
contribute to its value addition process by applying the concept of
balance scorecard. Content
Classes
Page.
Require
01. Some important Instructions.................................... 005
02. Basic Concepts.......................................................
007 1
03 Budgetary Control & Performance measurement...... 010 5
04. Pricing & Pareto Analysis........................................ 027
1
05. Absorption Costing pricing technique....................... 031
2
06. Pricing on ROI or ROCE...........................................
033 1
07. Standard Costing...................................................
..036 9
08. Marginal Costing: C.V.P. Analysis........................... ..065
4
09. Decision Making : Marginal, etc.............................. 078 6 10. Activity Base Costing............................................
101 2
11. Life Cycle Costing.................................................
112 1
12. Value Analysis......................................................
.. 116 0.5
13. Target Costing......................................................
121 1
14. J.I.T. , M.R.P. & E.R.P. ............................................
.125 2 15. Costing of Service Sectors................................ 134
1.5 16. Total Quality Management......................................
142 2.0
17. Relevant Costing Technique................................... 152
4.5
18. Transfer Pricing................................................... .
172 2.5
19. Learning Curve......................................................
.183 2.5
20. Assignment ..........................................................
.191 2
21. Simulation...........................................................
196 2
22. P.E.R.T. & C.P.M....................................................
201 5
23. Transportation................................................... ..
212 3
24. Linear Programming..............................................
219 3
25. New Topics..........................................................
. 227
26. Uniform Costing & Inter farm comparison................. 234
27. Tables...............................................................
. .263 Paper 5: Advanced Management Accounting (New Syllabus)
(One paper - Three hours - 100 marks) Level of Knowledge : Advanced knowledge Objective : (a)To apply various management accounting techniques to
all types of organizations for planning, decision
making and control purposes in practical situations.
(b)To develop ability to apply quantitative
techniques to business problems 1. Cost Management
(a) Developments in the business environment; just in time; manufacturing
resources planning; (MRP); automated manufacturing; synchronous
manufacturing and back flush systems to reflect the importance of accurate
bills of material and routings; world class manufacturing; total quality
management. (b) Activity based approaches to management and cost analysis
(c) Analysis of common costs in manufacturing and service industry
(d) Techniques for profit improvement, cost reduction, and value analysis
(e) Throughput accounting
(f) Target costing; cost ascertainment and pricing of products and services (g) Life cycle costing (h) Shut down and divestment. 2. Cost Volume Profit Analysis
(a) Relevant cost (b) Product sales pricing and mix
(c) Limiting factors (d) Multiple scarce resource problems
(e) Decisions about alternatives such as make or buy, selection of
products, etc. 3. Pricing Decisions
(a) Pricing of a finished product (b) Theory of price (c) Pricing
policy
(d) Principles of product pricing (e) New product pricing (f)
Pricing strategies
(g) Pricing of services (h) Pareto analysis 4. Budgets and Budgetary Control
The budget manual, Preparation and monitoring procedures, Budget variances,
Flexible budgets, reparation of functional budget for operating and non-
operating functions, Cash budgets, Capital expenditure budget, Master
budget, Principal budget factors. 5. Standard Costing and Variance Analysis.
Types of standards and sources of standard cost information; evolution of
standards, continuous -improvement; keeping standards meaningful and
relevant; variance analysis; disposal of variances.
(a) Investigation and interpretation of variances and their inter
relationship
(b) Behavioural considerations. 6. Transfer pricing
(a) Objectives of transfer pricing (b) Methods of
transfer pricing
(c) Conflict between a division and a company (d) Multi-national
transfer pricing. 7. Cost Management in Service Sector 8. Uniform Costing and Inter firm comparison 9. Profitability analysis - Product wise / segment wise / customer wise 10. Financial Decision Modeling:
(a) Linear Programming
(b) Network analysis-PERT/CPM, resource allocation & resource leveling
(c) Transportation problems (d) Assignment problems (e) Simulation
(f) Learning Curve Theory (g) Time series forecasting (h) Sampling
and test of hypothesis
Some Important Instruction
Basic Strategy of Success in Examination 1. Maintain separate copies (Rule sheet) for class note & home
work.
2. All pages should be numbered.
3. Mention the corresponding copy and page no. at the side of each
problem. This is very important for cross reference and it helps
to reduce your revision time, mainly before the examination.
Maintain content in each copy.
4. Our main objective in the examination is to score 65%+, because
the end of the day every one will ask how much u score, not how
much u answer. So, our simple strategy is to answer 80+ with
good quality, so that the score is automatically 65+. Many
students score 72, 73 by answering 80 or 85 out of 100 marks
paper. 5. Generally maximum theory to answer is 34 marks or min 16 marks.
So , plan ur exam according to ur strength in theory & problem.
As we write only 80 or 85 marks in 3 hours, automatically we get the
following advantage:
a. Available time to answer per question will increase
b. Reduces no. of mistakes, which a student normally does to
attempt of 100 marks within the same time.
c. Increase quality of answer.
d. Help to avoid the hardest question in the paper So, getting 70 marks by answering 80 is not an impossible task but need a
good strategy.
Pre-conditions of quality answers are: 1) Proper heading for each statement & working note.
2) Write units and notation with every calculation, particularly